New York (May 14, 2002) -- In contrast to steep pay growth in recent years, average total salaries of Chief Financial Officers at leading U.S. companies grew only slightly in 2001, up 2% to $2.92 million.

As was the case with most other top-level executives, salary and long-term incentives increased in value, while annual incentive and stock option values declined, according to executive compensation consultants Pearl Meyer & Partners.

Average long-term incentive was the only pay component for CFOs to see double digit growth, up 12% to $522,000, followed by an 8% rise in salary to $535,000. Annual incentives declined 5% to $444,000, while the imputed value of stock options fell 2% to $1.4 million. Stock options continue to dominate CFO packages, accounting for about half of average total remuneration, with the remainder of pay comprised about equally of salary, annual incentive and long-term incentive.

"CFO compensation in 2001 clearly reflects the market slump, reversing the recent trend of double digit pay hikes for many senior executives," said Steven E. Hall, managing director of Pearl Meyer & Partners. "The increased value of long-term incentives suggests that business and financial performance incentives are staging a comeback after a period in which corporations came to rely heavily on stock price to motivate and reward their top executives."

Despite growth in the value of long term incentives, corporate financial officers below the CFO rank generally saw modest increases in 2001, with some pay packages shrinking. Top tax executives fared best, with a 5% rise in total pay to $805,000. Average pay for controllers in 2001 was virtually unchanged at $958,000, despite a 38% increase in long-term incentive to $130,000. Average pay for top audit executives fell 10%, to $546,000. Treasurers suffered a 4% decline in pay to $905,000, with cuts in every component except salary, which grew 4% to $269,000.

-- Electronic Accountant Newswire staff

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